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Wilson, Ruth --- "Case Note: Fortex Group Ltd (In Receivership and Liquidation) v MackIntosh" [1998] WkoLawRw 6; (1998) 6 Waikato Law Review 127


FORTEX GROUP LTD (In Receivership

and Liquidation) v MACINTOSH



Fortex Group Ltd (In Receivership and Liquidation) v MacIntosh[1] is a recent decision of a five member Court of Appeal[2] which puts in question the future role of the remedial constructive trust in New Zealand. Prior to this decision it could have been safely assumed that the remedial constructive trust was part of the New Zealand judicial armoury, but now this assumption has been put on the agenda for further consideration.

As Tipping J emphasised, the case before the Court did not require any final decision whether the distinction between institutional and remedial constructive trusts[3] is a helpful one, or any closer analysis of the underlying concepts, or even a decision “whether the so-called remedial constructive trust should be confirmed as part of New Zealand Law”. These matters, now signposted for future judicial consideration, have been left to “await another case in which those issues necessarily arise”.[4]

However, despite the overall impression that this decision takes away more than it gives, it does contain some guidance for future cases. In particular the joint judgment:

- articulates unconscionability as a single foundational principle to explain or justify the imposition of both types of constructive trust;

- clarifies the unconscionability principle so as to recognise the position of any third party who has an interest in the property that would be affected by the imposition of a remedial constructive trust. It is the conscience of the latter party, not the original wrongdoer’s conscience, that is relevant;

- recognises that there may be occasions where a proprietary remedy “such as the so-called remedial constructive trust”, would be a useful weapon in equity’s armoury;

- counsels against varying settled insolvency rules on too loose a basis by according priority via a remedial constructive trust;

- clarifies the need for subject matter in the form of a separately identifiable fund for express and institutional constructive trusts;

- confirms that the extended notion of tracing suggested in Space Investments Ltd v Canadian Imperial Bank of Commerce Trust Co (Bahamas) Ltd[5] is limited to cases of express or institutional constructive trusts and is of no assistance where money has been paid into an overdrawn account.

This note will describe the decision, compare it with the law as previously understood, and comment on the changes it may herald. It will conclude that, given the potential of the remedial constructive trust to re-order proprietary rights, the current uncertainty as to its doctrinal underpinning is undesirable. It will suggest that the Court of Appeal is putting the profession on notice that if this trust is to remain part of our law the underlying concepts require further analysis.


1. The facts and issues

The plaintiffs were employees of the Fortex group of companies and members of the company’s two superannuation schemes. The two funds (for management and non-management employees respectively) had been established by trust deeds in similar terms and imposed similar obligations on Fortex Group Ltd (which was both participating employer and the trustee of the fund established under the scheme). Both funds involved contributions made by the employees (by way of deduction from their salaries and wages) supplemented by contributions from Fortex. The trust deeds required all contributions to be made to the trustee monthly.

On Fortex’s collapse it emerged that, although journal entries had been made by Fortex regarding the funds, the company had adopted the practice of paying the total contributions to the management fund on an annual basis. No separate fund had been set up in respect of the unpaid contributions prior to the intended annual payment to the scheme manager. When receivership supervened, payments from the previous year were outstanding. Fortex had, however, until shortly before receivership, made fortnightly payments to the staff fund. Once the priority accorded to employees under section 308 of the Companies Act 1993 was taken into account, the management fund and the staff fund were owed $257, 592.45 and $45, 830.55 respectively.

It also emerged that, if Fortex’s accounts were looked at on a consolidated basis, the company had been in overdraft throughout the relevant period.

In these circumstances the plaintiffs, having obtained summary judgment against Fortex for breach of contract and breach of trust, sought priority ahead of the secured and unsecured creditors by seeking a declaration that Fortex held the relevant sums on either an express or constructive trust, or that they were entitled to a restitutory proprietary interest in the form of a remedial constructive trust.

In the High Court Gallen J dismissed the claims to an express trust and a constructive trust on the basis that there was no identifiable trust property. However, he upheld the remedial constructive trust claim.[6]

Fortex and the trustee for the group’s secured debenture stockholders appealed. The management scheme employees cross-appealed from the judge’s rejection of their claim to an express or institutional constructive trust. The appeal was allowed and the cross-appeal dismissed. The employees were relegated to the status of unsecured creditors.

2. The subject matter issue - express and institutional constructive trusts

Gallen J applied the third of Lord Browne-Wilkinson’s fundamental trust law propositions identified in Westdeutsche Landesbank Girozentrale v Islington Borough Council:[7] “[i]n order to establish a trust there must be identifiable trust property”.[8]

The plaintiffs’ alleged trust property consisted of “contributions by way of deduction which they never received and which were never in fact paid to anybody and contributions which Fortex was contractually bound to make, but which were never paid”.[9] The defendants argued that the journal entries did not transfer funds, but merely reflected contractual arrangements without conferring proprietary rights sufficient to enable the funds to be traced.

Gallen J accepted “that Fortex must be deemed to have identified for trust purposes, at least those sums which would have represented the contributions of the plaintiffs to the fund as having been deducted from their salaries and wages” (emphasis added). However he held that, as Fortex’s account was always overdrawn, “no sum was ever set aside which the plaintiffs could now claim remained identified by a trust attached to it”.[10] He relied on the English Court of Appeal decision in Bishopsgate Investment Management Limited (in liq) v Homan,[11] which held that equitable tracing, though designed for the protection of trust money misapplied, cannot be pursued through an overdrawn and therefore non-existent fund. The constructive trust claim also foundered for much the same reason.

On appeal, Tipping J upheld Gallen J’s conclusions but on the basis that “the retained moneys were never separately identifiable as a fund in themselves”, and that “at no time was there any separately identifiable fund in respect of which Fortex can be regarded as having become a constructive trustee for the plaintiffs”.[12] If this was so, and there never was any identifiable trust fund, it was not necessary to consider the further question of whether that fund was traceable (that is, had remained identifiable). Therefore the overdrawn account was not relevant. Nonetheless, the joint judgment addressed this issue: “when the retained moneys were effectively retained in, or paid into an overdrawn bank account, they either never had, or ceased to have, any separate identity”.[13] In actual fact there were no retained moneys but, this aside, the reference to the overdraft raises the question of what would have happened if the account had been in credit.

3. The remedial constructive trusts issue

In the High Court, Gallen J, using terms not entirely familiar to all practitioners, recognised “a restitutionary proprietary interest by way of a remedial constructive trust on the ground of unjust enrichment”. The following points are made as background to the discussion in Fortex.

Restitution is a remedial response available in two dimensions.[14] First, it is the sole remedial response to all those cases where the cause of action or basis of liability is unjust enrichment. If a plaintiff can show a basis of unjust enrichment, “the defendant has a restitutionary duty, so named because the content of her duty is the transfer back of wealth received”.[15] In these so called autonomous unjust enrichment cases, both the cause of action and the remedial response belong to the law of restitution. The defendant must make restitution because she has been enriched. Liability is strict (that is, not conscience-based) subject to defences.

Secondly, the response of restitution may be available in cases where liability is based not on unjust enrichment but on some other duty arising in tort, equity or contract. These so-called “restitution for wrongs cases” are concerned with defining the circumstances in which the plaintiff can claim a gain from the defendant received as a result of the defendant’s wrongdoing. Where equitable wrongs are involved, liability is conscience-based. These cases are relevant to the law of restitutionary responses, but they are not part of it. Restitutionary responses (remedies) are part of the law of restitution.[16]

In cases of autonomous unjust enrichment, the plaintiff must establish (i) an enrichment of the defendant that is (ii) at the expense of the plaintiff and that (iii) the enrichment is unjust.[17] There is no need to establish unjust enrichment in cases involving restitution for wrongs. However, some cases are susceptible to analysis in both the categories. Indeed, although the above distinction between the two types of case was not drawn in Fortex, Gallen J appears to have regarded the case as one of autonomous unjust enrichment. The joint judgment in the Court of Appeal approached the case from the perspective of equitable wrongdoing. Henry J took both approaches.

As Fortex illustrates, where insolvency is involved, the restitutionary claimant will seek a proprietary restitutionary response, not a personal one. A restitutionary proprietary claim is made by a plaintiff alleging that certain property ought to be hers in contrast to a pure proprietary claim in which she alleges that the property is hers. If granted, this may enable the plaintiff to relief in priority to secured and unsecured creditors of the insolvent party who received the gain from the plaintiff. The court may respond to a restitutionary proprietary claim by imposing a remedial constructive trust, thereby creating property rights in the claimant where none previously existed.

The doctrinal basis on which the courts in America and Canada will impose such a remedy is unjust enrichment. On the other hand, New Zealand courts have tended to see the remedial constructive trust broadly as a device to redress unconscionability.[18] Accordingly, Gallen J’s decision could be seen as an attempt to move towards the North American approach to the imposition of the constructive trust.

On the question of unjust enrichment, His Honour reasoned that, although no monetary enrichment was received by Fortex, the company obtained an advantage in that it avoided paying interest on an increased overdraft, and it freed up for general purposes funds which it was under a fiduciary obligation to use for the benefit of the plaintiffs. These factors provided “at least an element of unjust enrichment”.[19] As to the first factor, as Henry J would later point out, the enrichment would be the interest “saved” on the unpaid contributions not the unpaid contributions themselves. As to the second factor, there were no funds to which any fiduciary obligation had attached.

Next, His Honour turned to “unconscionable behaviour or unconscionality”, not as an alternative basis for the imposition of a remedial constructive trust but to decide “was there any enrichment and was that enrichment unjust”.[20] It is difficult to see how this would assist in determining the first question. Nonetheless, His Honour held that there was “a degree of enrichment” and that enrichment was unjust because of Fortex’s fiduciary obligations and the employer/employee relationship.

He concluded in a passage which would later be quoted by the Court of Appeal:

Looked at overall, Fortex clearly gained an advantage because it did not carry out the obligations which were imposed upon it. That involves a degree of unjust enrichment.

I am satisfied that Fortex gained an advantage sufficient to justify the intervention of the Courts if in other respects that intervention is appropriate. I am satisfied also that the necessary grounds of conscience which justify equitable intervention, have been established and arise substantially because of the nature of the relationship between the parties, the nature of the obligation which existed, the recognition and part performance of it and the effect on the plaintiffs.[21]

In the Court of Appeal Tipping J selected unconscionability as the “principled basis” for declaring that assets owned in law by A should be held by way of remedy in trust for B both vis a vis A and any other person with an interest in the property which would be affected by the imposition of the trust :

Equity intervenes to prevent those with rights at law from enforcing those rights when in the eyes of equity it would be unconscionable for them to do so.[22]

As all Fortex’s assets would be required to satisfy the indebtedness secured by the debenture, only the secured creditors had any legal rights to them. Accordingly, the plaintiffs could establish a remedial constructive trust only if they could “point to something which can be said to make it unconscionable - contrary to good conscience - for the secured creditors to rely on their rights at law”. Tipping J examined the “necessary grounds of conscience” identified in the court below and concluded that Gallen J seemed to have been looking at Fortex’s conscience rather that that of the secured creditors. This was incorrect as “[i]t is of course, the conscience of the secured creditors which is crucial in this case”.[23]

The claimants’ argument that the conscience of the secured creditors was irrelevant, in that there was no need to say that their conscience was in any way affected, was firmly rejected by Tipping J, along with an alternative argument that there was an element of unjust enrichment which should affect the secured creditors’ conscience.[24]

This latter argument was dealt with very briefly probably because Tipping J felt it inappropriate to regard the secured creditors as having been enriched at all, let alone unjustly so. Nonetheless, the Court seemed to think that if there had been enrichment the secured creditors were entitled to it on the basis of their security granted in return for advancing money to the company. This seems to involve a determination of the unjust enrichment question as between the company and the secured creditors rather than between the secured creditors and the claimants, and as such is inconsistent with the approach to the unconscionability argument.

Finally, counsel for the claimants argued (without specifying whether this argument was by way of analogy to unjust enrichment or was raised in connection with unconscionability) that the value of the money was “latent” in Fortex’s general assets. The decision in Space Investments[25] and the Gillies v Keogh[26] line of cases formed the basis of this argument. Although Tipping J incorrectly summarised the outcome in the first case and again referred to “the retained moneys” as if they really existed, he effectively quashed any notion that the extended notion of tracing suggested in the obiter in Space Investments might have any application to remedial constructive trust cases or was of assistance where money had been paid into an overdrawn account.

The Gillies v Keogh line of cases was distinguished:

The constructive trust which arises in de facto matrimonial property cases is of an institutional, rather than remedial kind. That is an immediate point of distinction.
Furthermore, the constructive trust which arises in such cases is itself conscience based.

...[this] line of cases serves to confirm the need for the conscience of the secured creditors in the present case to be affected.[27]

As well as indicating a single foundational principle for both types of constructive trust, this passage preserves the distinction between them.

The joint judgment ended, on the same note as it had opened, by stressing the unsettled position of the remedial constructive trust. The link between the defendant’s insolvency and the plaintiff’s desire for a proprietary remedy was referred to, along with the potential for third party rights to be affected:

If the plaintiff wishes to gain priority over those who would otherwise be entitled to the defendant’s assets, the court must be careful not to vary settled insolvency rules on too loose a basis. That said, there may be occasions, in the present field or others, when a proprietary remedy, such as the so-called remedial constructive trust, would be a useful weapon in equity’s armoury.[28]

4. The subject matter or identifiability issue for remedial constructive trusts

In the High Court Gallen J held that in an appropriate case a court exercising its general equitable jurisdiction could attach a trust to other assets otherwise unassociated with the particular claim.[29]

On appeal Tipping J required only “some asset or assets in the defendant’s hands in respect of which the Court considers it to be appropriate to impress a trust in favour of the plaintiffs”. However, Henry J regarded the absence of any separate and identifiable fund to which the employees could lay a claim “as a fundamental objection to the imposition of a trust”.[30]


1. Continued availability of the remedial constructive trust in New Zealand?

Taken at face value, this important decision reflects a significant retreat from the Court of Appeal’s endorsement of the remedial constructive trust in the last decade. First granted within the context of de facto property disputes, the Court indicated in its 1989 decision in Elders Pastoral Ltd v Bank of New Zealand[31] that it was prepared to make the remedy widely available. Although the Privy Council reversed the decision on another ground, their Lordships did not deal with the constructive trust issue and it would seem that the Court of Appeal’s findings thereon remained authoritative.

In 1992 the availability of the remedial constructive trust went unquestioned by Gault and McKay JJ in Liggett v Kensington.[32] On the facts of the case, Gault J was prepared to impose such a trust, McKay J was not and Cooke J preferred an alternative approach.

When the case went to the Privy Council as Re Goldcorp Exchange Ltd (In Receivership) : Kensington v Liggett[33] Lord Mustill, discussing whether the Court should create a remedial restitutionary right after the event which would take priority over the secured creditor, far from suggesting that it could never do so, indicated that in appropriate factual circumstances remedial restitutionary rights “may prove to be a valuable instrument of justice” in what he had previously described as “this important new branch of the law”.[34]

Against this background, and the final conclusion in Fortex as to the usefulness of the remedy “in all types of case”, the decision in this case cannot be regarded as an outright rejection of the remedial constructive trust in New Zealand. Furthermore it is, with the greatest respect, difficult to accept that the court’s power to impose such a trust is uncertain or in need of confirmation. No authority was cited in support of the reservations voiced in the joint judgment. Henry J, while noting that the concept “has not been sufficiently developed” since its uncertainties were noted in Goldcorp, did not question its availability. Blanchard J preferred to leave the question to another day.

It is submitted that what really concerned the Court was not the availability of the remedy as much as the need to establish a principled basis on which it may be invoked and some criteria to guide the Court in exercising its discretion whether to invoke it or not. This is entirely appropriate. If the court is to have the power to redistribute property rights via the powerful weapon of the remedial constructive trust, the potential “victims” must have some indication of the circumstances that will render their property rights vulnerable. As Henry J pointed out, there has been insufficient development in the last decade.

2. The underlying principles in previous cases

In Elders Pastoral Ltd,[35] the underlying principle was unconscionability.[36] In Liggett v Kensington,[37] Gault J, while unwilling “to attempt any general judicial formulation” of the underlying principles, granted relief on the basis of the insolvent company’s overall “inequitable and unconscionable conduct”, subject to consideration of the competing claim of the secured creditor. He indicated that he would be reluctant to impose a constructive trust if the secured creditor had obtained its security for value and without notice of the circumstances underlying the plaintiffs’ claim. The latter factors seemed to go to remedial discretion rather than to the initial availability of remedy question, but were irrelevant as His Honour considered that the secured creditor had notice.

McKay J, discussing the Elders “unconscionability” test, noted that

this does not mean that a constructive trust is to be imposed on the basis of some vague idea of what might seem fair. It is prevent a person from retaining a benefit in breach of his legal or equitable obligations.[38]

Although the basis of the non-allocated claimants’ claim in the Privy Council in Re Goldcorp Exchange Ltd[39] does not emerge clearly from the advice, it appears to have been advanced on the grounds of unjust enrichment, injurious dealing with the subject matter of the alleged trust, or some wider equitable principle (perhaps unconscionability). While noting that the doctrine underpinning the remedy “is still in an early stage and no single juristic account of it has yet been agreed”, Lord Mustill firmly rejected any approach based on a new equity permitting intervention to redress an imbalance between the two parties.[40]

3. Unconscionability as a single foundational principle in Fortex for both institutional and remedial constructive trusts

Whereas Gallen J’s judgment in the High Court sought the underlying principles from within the law of restitution, the Court of Appeal’s joint judgment showed more than the consistent reluctance to apply unjust enrichment doctrine and preference for the application of equitable principles noted by New Zealand commentators in the early 1990’s.[41] Here unconscionability was the clear victor.

The remedial constructive trust seems to have been regarded as operating within the law of property as the means by which equity restrains the unconscionable exercise of legal property rights. It was not seen as having any competence within the law of restitution (itself part of the law of obligations) because conscience “is the whole basis upon which equity intervenes to restrain reliance on rights at law”.[42] As the unjust enrichment principle operates on a strict liability basis subject to the availability of certain defences, this is a clear indication that unconscionability is now the sole foundational principle in New Zealand for the imposition of a remedial constructive trust over property to which others have legal rights.

The decision also clarifies the concept of unconscionability. Where, on insolvency, the original defendant has effectively been eliminated from the picture and the secured creditors have rights to the assets, it is their conscience which is crucial. As this factor led to the conclusion that the remedial constructive trust was not available as a matter of principle, it was not necessary to consider whether it should be granted as a matter of discretion, and the decision contains no indication of what factors might be relevant to that inquiry.

4. The subject matter or identifiability issue for remedial constructive trusts

Although identifiable subject matter is not required in this context, neither initially nor for tracing purposes, Thorp J, in the High Court in the opening stage of the Goldcorp litigation,[43] required a causal connection between the unconscionable conduct and the alleged subject matter. On appeal, McKay J saw the existence of a causal nexus between the claimant and the property in respect of which a constructive trust is sought as a relevant consideration without deciding whether it was essential. In the Privy Council, Lord Mustill noted, in denying the claim, that “the Company’s stock of bullion had no connection with the claimants’ purchases, and to enable the claimants to reach out and ... abstract it ..would give them an adventitious benefit”.[44]

Unfortunately this issue was disposed of very briefly in the joint judgment in Fortex without any indication of when the Court might find it “appropriate” to impose a trust on assets in the defendant’s hands.[45]

5. The subject matter or identifiability issue for express and institutional constructive trusts

This issue was at the heart of the Goldcorp decision. There never had been any identifiable bullion to which any trust could attach. Without identifiable subject matter there could be no express or institutional constructive trust. The judgment in Fortex makes the point that where the subject matter of the alleged trust is money there must be a separately identifiable fund. A credit balance would therefore be insufficient without specific appropriation.


Although the remedial constructive trust has been available in the commercial sphere for nearly a decade, its juristic basis has been open-ended and therefore productive of much uncertainty. While this will often be the case with new developments, the Court of Appeal, in a decision which will be welcomed by the commercial community, has clearly indicated the need for future articulation of the underlying doctrine and its requirements with greater precision. This is commendable.

The Court also gave a strong indication that unconscionability rather than unjust enrichment was the single underlying principle. Although this has the attraction of simplicity it is not clear why unjust enrichment should be ruled out. Certainty does not require its rejection and indeed may be better served by a meticulous analysis of the facts within the framework of unjust enrichment.[46]

These matters await resolution for another day. Fortex provides notice that the Court of Appeal is minded to take a very close look at the remedial constructive trust when that day dawns.

[*] LLB (Victoria), Lecturer in Law, University of Waikato.

[1] [1998] 3 NZLR 171.

[2] The result was unanimous. Tipping J delivered the leading judgment on behalf of himself, Gault and Keith JJ, with individual judgments delivered by Henry and Blanchard JJ. Henry J agreed with the conclusions and reasons contained in the joint judgment regarding the express and institutional constructive trust, but approached the remedial constructive trust differently; and Blanchard J agreed both with the joint judgment and Henry J’s observations.

[3] The remedial constructive trust, along with the express and institutional trust, were defined for the purpose of the case: “An express trust is one which is deliberately established and which the trustee deliberately accepts. An institutional constructive trust is one which arises by operation of the principles of equity and whose existence the Court simply recognises in a declaratory way. A remedial constructive trust is one which is imposed by the Court as a remedy in circumstances where, before the order of the Court, no trust of any kind existed. The difference between the two types of constructive trust, institutional and remedial, is that an institutional constructive trust arises upon the happening of the events which bring it into being. Its existence is not dependant on any order of the Court. Such order simply recognises that it came into being at the earlier time and provides for its implementation in whatever way is appropriate. A remedial constructive trust depends for its very existence on the order of the Court; such order being creative rather than simply confirmatory” (supra note 1, at 172-173).

[4] Supra note 1, at 173.

[5] [1986] UKPC 1; [1986] 1 WLR 1072.

[6] MacIntosh v Fortex Group Ltd (1997) 6 NZBLC 102,141.

[7] [1996] UKHL 12; [1996] 2 All ER 961, 988. Lord Browne-Wilkinson’s “Identifiable Trust Property Principle” is discussed at pp 87ff of this Review. On appeal, Lord Browne-Wilkinson’s third trust principle was not specifically discussed but the reasoning in the joint judgment in Fortex is consistent with the interpretation of that principle in the above article.

[8] (1997) 6 NZBLC 102,141, 102,146.

[9] At 102,146.

[10] At 102,147.

[11] [1994] EWCA Civ 33; [1995] 1 All ER 347.

[12] [1998] 3 NZLR 171, 174-175 (emphasis added).

[13] Supra n 1 at 5 (emphasis added).

[14] Rickett, C and Goddard, D NZLS Seminar - Developments in the Law of Obligations - Tort, Equitable Duties and the Effect of Contractual Relationships (1996) 8.

[15] Ibid, 6.

[16] Rickett and Goddard, supra note 14, at 9.

[17] Ibid, 4.

[18] Fardell and Fulton, “Constructive trusts - A new era” [1991] NZLJ 90.

[19] (1997) 6 NZBLC 102,141, 102,149.

[20] At 102, 150.

[21] At 102,150.

[22] [1998] 3 NZLR 171, 175.

[23] At 176. Henry J concurred in general terms with the joint judgment’s treatment of the unconscionability point.

[24] At 177: “We cannot accept that proposition, which flies in the face of the whole basis upon which equity intervenes to restrain reliance on rights at law”.

[25] Space Investments Ltd v Canadian Imperial Bank of Commerce Trust Company (Bahamas) Ltd and Ors [1986] UKPC 1; [1986] 3 All ER 75.

[26] [1989] NZCA 168; [1989] 2 NZLR 327.

[27] [1998] 3 NZLR 171, 178.

[28] At 179.

[29] (1997) 6 NZBLC 102,141, 102,150.

[30] [1998] 3 NZLR 171, 175, 180.

[31] [1989] NZCA 406; [1989] 2 NZLR 180.

[32] [1993] 1 NZLR 257.

[33] [1994] NZLR 385.

[34] At 405 and 401.

[35] [1989] NZCA 406; [1989] 2 NZLR 180.

[36] See generally Rotheram, “The Redistributive Constructive Trust: Confounding Ownership with Obligation” [1992] CanterLawRw 6; (1992) 5 Canterbury Law Review 84, and Dixon, “ The Remedial Constructive Trust Based on Unconscionability in the New Zealand Environment” (1992) 7 AULR 147.

[37] [1993] 1 NZLR 257, 281 and 282.

[38] At 293. Cooke J, the third member of the court (who had also sat in Elders) did not need to consider the availability of a redistributive remedy in this case as he found for the claimants on other grounds.

[39] [1994] 3 NZLR 385, 400.

[40] At 404.

[41] Peart, “A Comparative View of Property Rights in De Facto Relationships: Are we all driving in the same direction?” (1989) 7 OLR 100, 133, and Dixon, supra note 36, at 164.

[42] [1998] 3 NZLR 171, 177 (emphasis added).

[43] Robinson v Goldcorp Refiners Limited (In Receivership), unreported, High Court, Auckland, 17 October 1990, Thorp J.

[44] [1994] NZLR 385, 400-401.

[45] For a discussion of causal link, see Fardell, and Fulton, supra note 18.

[46] Cf Lord Browne-Wilkinson’s recent suggestion in Westdeutsche Landesbank Girozentrale v Islington Borough Council [1996] UKHL 12; [1996] 2 All ER 961, 999 that proprietary restitutionary remedies might be developed by the recognition of the remedial constructive trust in English law: “The court by way of remedy might impose a constructive trust on a defendant who knowingly retains property of which the plaintiff has been unjustly deprived. Since the remedy can be tailored to the circumstances of the case, innocent third parties would not be prejudiced and restitutionary defences such as change of position, are capable of being given effect”. See also the discussion of the above suggestion in Friar, “Equity, Restitution and Commercial Commonsense” [1996] NZLJ 447, 449 and 450.

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